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FPA Glossary Project

Have you been on other forex sites and seen the glossaries? Some of the definitions are vague. Others look like they came out of some graduate level textbook and you need a dictionary just to figure out what they are talking about.

As part of the FPA's continuing mission to help educate traders, a glossary has been added. Even better, words defined in this glossary and used in posts will end up getting linked to the definitions. Let's see if it works. Some of the words defined are:FOMCCableSwissyRetrace

I'd like to thank the Admins for letting me coordinate the early phases of this project. Also, I'd especially like to thank Rpaco for providing some very helpful definitions and Cyclon for providing the longest definition yet ( Elliott Wave ).

The glossary can be accessed from the green menu on top of the page, or you can click here:

Currently there are only 53 words in the glossary. This is where you can help. If there's a forex-related word you want to know the definition of, ask in this thread. If someone asks about a word and you know the definition, post it in this thread. If you think one of the definitions in the glossary needs some improvement, post your suggestions in this thread.

Together, we can make FPA's glossary into the source for useful, understandable definitions of the forex trading terms that you need to know. I look forward to everyone's input.

Kiwi: The nickname for the New Zealand Dollar or terminology for USD/NZD pair

PIP: The smallest price change that a given exchange rate can make. Since most major currency pairs are priced to four decimal places, the smallest change is that of the last decimal point - for most pairs this is the equivalent of 1/100th of one percent, or one basis point.

Spread: Spread is the difference between the ask price (the price you buy at) and the bid price (the price you sell at) quoted in pips. If the quote between EUR/USD at a given moment is 1.2222/4, then the spread is 2 pips. If the quote is 1.22225/40, then the spread is 1.5 pips.

I have more - especially on fundamental terms but I don't know if you guys want to hear these!

"Revisions" explained

A statistical release is a best attempt at measuring some indicator using incomplete information. The longer one waits for data, the more complete the data is and the more accurate the indicator is. There is thus always a tradeoff between the speed of release and its accuracy. Sometimes, when a particular month's data is released, more complete information has significantly altered the calculation of the previous month's data and so the previous month's data is revised.

For example, if January's Non-Farm Payrolls (NFP) is 100,000, and February's comes out at 10,000 then this shows weakness in the US job market and is negative for the USD. Now, in March, NFP is 110,000 and this, by the same logic, is good news out of the US job market.

However, if at the same time as the March release, they revise February's data to 90,000, this shows that the reaction to what we thought was a much weaker reading in Feb was in actual fact, overdone, and the "recovery" from 10,000 to 110,000 in March is in fact a much smaller improvement from 90,000 to 110,000. There will be less reaction to the March release when you take into account the revision.

Kiwi: The nickname for the New Zealand Dollar or terminology for USD/NZD pair

PIP: The smallest price change that a given exchange rate can make. Since most major currency pairs are priced to four decimal places, the smallest change is that of the last decimal point - for most pairs this is the equivalent of 1/100th of one percent, or one basis point.

Spread: Spread is the difference between the ask price (the price you buy at) and the bid price (the price you sell at) quoted in pips. If the quote between EUR/USD at a given moment is 1.2222/4, then the spread is 2 pips. If the quote is 1.22225/40, then the spread is 1.5 pips.

I have more - especially on fundamental terms but I don't know if you guys want to hear these!

For the Proyect.- Related Pivot

Pivot Points
Pivot Points are also know as floor pivots. These are the places where traders expect support and resistance to occur in the market and as such are used as entry and exit points for trades.

Depending on the type of pivot formula used you can generally generate and use up to 9 levels. These levels are marked and calculated by starting with a center pivot called a Pivot Point and labeled as PP. From that point, moving up, the resistance levels are numbered sequentially as R1, R2, R3, R4 with R4 being the highest value. The support levels are numbered in the same way S1, S2, S3, S4 with S4 being the lowest support value.

There are a number of ways to calculate pivots points. Here are some of the more popular methods: a)Classic Pivot Points, b)Camarilla Pivot Points, c)DeMark Pivot Points, d)Woodie Pivot Points.

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investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in
foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.
The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you
should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign
exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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